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Nigerian Mobile Network Operators insist that from March 15th, 2021, they will commence the withdrawal of Unstructured supplementary service data (USSD) to banks to press home it's demand for payment of N42 billion. 

Banks across Nigeria are indebted to telecoms service providers to the tune of N42 billion for USSD services before the collection of the fees (USSD) were reversed back to them. 

The Association of Licensed Telecommunication Operators of Nigeria (ALTON), disclosed this in a statement signed by its Chairman, Mr Gbenga Adebayo and Head of Operations, Mr Gbolahan Awonuga, saying that its members were initiating a phased process of withdrawal of USSD services, starting from the most significant debtors with the financial services providers from March 15, until the huge debt was paid. 

Alton, however, knowing the challenge this action will pose on subscribers, encourages subscribers to explore alternative channels with their banks. 

ALTON gives justification for USSD service withdrawa

ALTON is aware of the resolution being sought to the on-going dispute between the banking sector and the telecoms sector over the appropriate methodology to use to charge for USSD services.

The background to this problem was that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with our members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service. 

Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.

Banks decision on billing methodology

Following the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by our members, the banks decided that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel.

This billing methodology where the Financial Service Providers (FSPs) customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement.

The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post implementation of end-user billing by our members.

The removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50. Additionally, the banks and telcos will be applauded for collaborating towards the financial inclusion objectives of the Federal Government.

Restrictions on MNOs

It has been more than eight (8) months since the Nigerian Communications Commission (NCC) issued an updated pricing methodology for USSD services for financial transactions in Nigeria. The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

During this time, Mobile Network Operators (MNO’s) have continued to provide access to USSD infrastructure and our members have continued to pay all Bank charges and fees to access the Banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over Forty-Two Billion (N42B) Naira.

ALTON members have continued to provide these services because our primary concern is that the millions of Nigerian customers who access financial services through our USSD infrastructure every day should be able to continue conducting their transactions.

This was given greater importance when customers became further reliant on these services due to COVID movement restrictions. Unfortunately, as it has been impossible to agree on a structure for these payments with the banks that do not involve the end-user being asked to pay, the government has been forced to intervene to ensure that a sustainable cost-sharing solution is agreed, that does not disadvantage the consumer in the long-term.

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